Methodology for an adjustment to the volume-related composite price index pursuant to paragraph 151(4)(c) of the Canada Transportation Act

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The Canadian Transportation Agency (Agency) is responsible for the annual determination of the Maximum Revenue Entitlements or "revenue caps" for each of the prescribed railway companies, the Canadian National Railway Company (CN) and the Canadian Pacific Railway Company (CP).  One element of that determination involves the development of the volume-related composite price index (VRCPI).

In July of 2011, CN and CP were notified by the Government of Saskatchewan that it will no longer be providing hopper cars (the Saskatchewan cars) to the railway companies free of ownership charges. As a result, each of CN and CP began making arrangements to either lease the Saskatchewan cars or to replace them with other cars. 

Subsequently, CN and CP filed applications with the Agency for an adjustment to the VRCPI pursuant to paragraph 151(4)(c) of the Canada Transportation Act (CTA).

Paragraph 151(4)(c) of the CTA directs the Agency to make adjustments to the index to reflect the costs incurred by the prescribed railway companies for the purpose of obtaining cars as a result of the sale, lease or other disposal or withdrawal from service of government hopper cars and the costs incurred by the prescribed railway companies for the maintenance of cars that have been so obtained.

After having examined the applications, the Agency finds it appropriate for an industry-wide consultation to be completed before rendering a decision on the adjustment to the VRCPI pursuant to paragraph 151(4)(c) of the CTA.

Targeted stakeholders have been invited to provide comments on the methodology proposed by the Agency for an adjustment to the VRCPI. Other organizations may be added to the consultation list if they have a direct interest in Western grain matters and express a desire to participate.

Once the Agency has received and considered comments received, it will render its decision on the matter and make an adjustment to the 2012-13 VRCPI.

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